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Mid-Swap

The reference rate which is used to calculate
the premium that a bond buyer will pay. Adding a spread to a
reference rate is one method to value a bond (or a Sukuk issue, as
in Islamic finance). The spread can be calculated with respect to a
benchmark, prominently the government bond rate, or the
swap rate of an
identical maturity. The bond price, according to this method, can be
a specific number of
basis points (bps) over the mid-swap. The mid-swap is the
average of bid and ask swap rates. As such, the bond price is made
up of x basis points in addition to the interest rate offered by the
swap market. Swap markets present an important source for medium and
long-term interest rates. For example, a Sukuk issue of USD 500
million, maturing in five years, can be priced at 287 basis points
over mid-swaps.

Generally speaking, mid-swap is the price calculated as the midpoint
between the bid and offer prices (buy and sell prices) on currency
or interest rate transactions (swaps).